Latin American Air Competition Starts To Sizzle

<B> Latin American Air Competition Starts To Sizzle</B>

By Jay Campbell

As more and more U.S. corporations do business in Latin America's rapidly emerging markets, major U.S. airlines are competing to carry business travelers to meetings and appointments south of the border.

With competition comes negotiation, and Corporate America clearly is attempting to get its hands around managing travel to the "hot countries" of Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela.

Though there are six American carriers serving the region and dozens of Latin ones, the airlines with which American companies are most likely to sign contracts are American, Continental, Delta and United.

With a hub in the Miami gateway, American is by far the market leader, with 58 percent of enplanements and 53 percent of departures in the fourth quarter of last year. Continental is second, at 21 and 16 percent, followed by United at 9 and 10 percent, and Delta at 5 and 6 percent.

With a questionable future in Asian air travel, a saturated European market and several new Latin open skies agreements in effect, all four carriers are bent on aggressively building their share of business to the continent--and a number of negotiating opportunities are at hand.

Delta, for example, has unleashed a wave of announcements of new service. Building on its Atlanta hub, it now is flying to Caracas, Guatemala City, Panama City, Rio de Janeiro, San Jose, San Salvador, Sao Paulo and, beginning July 1, Lima. The carrier also added a third daily Atlanta-Mexico City frequency and is building code-sharing partnerships with Mexicana and Transbrasil. "Presently, more than 14 million passengers travel between the U.S. and Latin America each year, with average yearly traffic growing at 10 percent through 2001," said Delta CEO Leo Mullin. "Miami is clearly overcrowded and will be hard pressed to handle this additional growth."

Continental is banking on the same scenario. Hoping to draw Northeast--particularly New York--business travelers who normally would connect in Miami, Continental is building its Newark hub as a non-stop option for service to Latin America. It announced a second daily flight to Cancun and Rio de Janeiro, and plans new flights to Guatemala City, San Jose, San Salvador and Santiago. From Houston, Continental has added Caracas and expanded to twice daily its service to Belize, Guatemala City, San Jose and San Salvador. It also is expanding its non-hub service to the region, with routes such as San Antonio-Mexico City.

While United added Denver-Mexico City, Chicago-Guatemala City and Washington-San Salvador (not to mention a major alliance with Varig of Brazil), American is attempting to fend off the new competition with a new one-stop flight between New York JFK and Cuzco, Peru, via Lima, a third daily flight between Miami and Lima, and new service between Miami and Cozumel. The carrier also is linking its AAdvantage program to LanChile's LanPass frequent flyer program. Meanwhile, American plans to add DFW-Panama City and Chicago-Monterrey, Mexico, service.